KUALA LUMPUR, June 14 — Like elsewhere in Malaysia, Johor’s economy is seeing a shift from manufacturing to services in recent years, with tourism and its related industries contributing greatly to the state coffers.
The country’s southernmost gateway neighbouring wealthy Singapore had almost seven million tourist arrivals in 2015, the highest number nationwide for that year, which is also the most recent data available on record.
How much tourist spending in terms of ringgit is yet unknown, but Johor Mentri Besar Datuk Seri Mohamed Khaled Nordin said the 8.2 per cent increase of tourists from 6.4 million in 2014 showed that this service subsector is a significant driving force for the state’s economic growth and one he has greats plans to develop further.
“For tourism, the state government through Iskandar Regional Development Authority (IRDA) has launched several initiatives including Ramsar Eco-Discovery, Iskandar Malaysia Heritage, Arts and Culture Trails, establishing Nusajaya as a Family, Fun and Leisure destination and many others,” he told Malay Mail Online in a recent email interview.
Besides these, he is keen to grow more tourism attractions in Johor that will utilise its strategic geographic location as the southernmost tip of Asia with balmy beaches curving around the western coast fronting the Malacca Straits to the South China Sea to the east.
In the Johor Strategic Growth Plan, Khaled said the state government is putting more emphasis to develop niche tourism areas in each district.
The state is already famous for its Legoland and Hello Kitty theme parks in Nusajaya.
Apart from tourism and to ensure sustainable overall growth in the services sector — which contributed 41 per cent to the state economy in 2015 — Khaled said the state has adopted measures to further develop its logistics, health, and business operation sub-sectors.
“Global Business Services (GBS) Iskandar was set up to facilitate local and foreign companies in setting up their GBS operations in Iskandar Puteri.
“The state is also strategising on the advancement of its logistics sector with the plan to integrate the management of three ports: Port of Tanjung Pelepas, Johor Port and Tanjung Langsat for a streamlined but more focused ports services,” he said.
This will then be supported by the five new logistic parks and distribution centres in Sedenak, Kulai, Senaim, Kempas and Tanjung Kupang, the mentri besar added.
As for healthcare, Khaled said the government-linked KPJ Healthcare has been tasked to come up with a masterplan to transform Iskandar Malaysia into a regional medical and healthcare hub. However, he did not detail the plan or when it is expected to happen.
While manufacturing in Johor played a secondary role to services in 2015, Khalid is upbeat that the sector will remain a key driver going forward this year and to even outperform the other states.
“We expect both the services and manufacturing sectors to contribute significantly in 2017,” he said.
In terms of contribution to Johor’s 2015 GDP, manufacturing contributed 30.7 per cent while agriculture came in third at 14.9 per cent followed by construction at 5.8 per cent and mining at 0.4 per cent.
Khaled said the state has also been promoting petroleum and petrochemical products, natural gas as well as biotechnology as the new growth industries.
“Iskandar Malaysia will continue to drive economic growth through projects such as Tanjung Piai Maritime Industrial Park, Nusajaya Tech Park, FASTrack Iskandar and many others, propelling Johor’s economic contribution.
“In addition, several mega projects in the works in Johor such as the High Speed Rail project between Singapore and Kuala Lumpur, electrified double-tracking project connecting Gemas and Johor Bahru and the Pengerang Oil and Gas Hub should continue to grow Johor’s economic contribution in 2017,” he said.
Social mobility reality check
While the state performed reasonably well in terms of GDP growth, DAP lawmaker Liew Chin Tong said it appeared to be mostly concentrated in Greater Johor Baru.
More thought and planning was needed to improve the livelihood opportunities for Johoreans living further afield, he said.
“Most of the Johorean middle class outside the greater JB area are working either in Singapore or KL. That is no good.
“Johor's economy is stuck in the middle and not able to move up the ladder to provide sufficient middle class jobs that pay decently,” he told Malay Mail Online when contacted.
In the context of disposable income of those residing in the state, the Kluang MP said, the combined effects of the goods and services tax, subsidy rationalisation coupled with the weakening ringgit were making it hard for residents to keep aside a substantial amount of their salaries for savings.
“When people have less disposable income to consume and invest, how is the economy going to be good for the ordinary folks?” he asked.